TV viewers tune in to America's Cup but jury out on finances

Fans of Emirates Team New Zealand cheer after their team defeated Oracle Team USA during Race 11 of the 34th America's Cup yacht sailing race in San Francisco, California September 18, 2013.

Reuters/Robert Galbraith

SAN FRANCISCO Televised coverage of turbocharged 72-foot catamarans vying for the 34th America's Cup has changed the channel from boring to thrilling on yacht racing.

At least 1 million U.S. viewers tuned in for the opening races when Emirates Team New Zealand took on Oracle Team USA earlier this month. The number surpassed expectations but still pales in comparison to mainstream sports.

The event was custom-made for television. The scenic backdrop of San Francisco Bay and high-speed racing in close quarters succeeded in drawing spectators. But questions remain about whether the event was worth the cost to sponsors and the city.

Scott MacLeod, a WSM Communications sports marketing agent who works with America's Cup teams and sponsors, said the Nielsen ratings for the matches between the government-backed Kiwis and software billionaire Larry Ellison's Oracle were good but not high enough to entice sponsors to put up enough money for teams enter such an expensive event.

MacLeod is not convinced of the long-term economic viability of televising the competition for the world's oldest sporting trophy - set to continue on Thursday.

"If they want to make it more commercially viable, they've got to cut the cost," MacLeod told Reuters.

The money problem has plagued the event, the brainchild of Oracle co-founder Ellison, since its inception. Building, maintaining and manning the technologically advanced yachts costs between $100 million and $200 million - far more than the net gain from the Cup's peak audience of one million.

"At the current ratings, you can't sell enough sponsorship to offset that cost," MacLeod said.

He compared the economics to auto racing. A typical NASCAR entry costs $25 million and can be expected to bring in 7 to 8 million viewers per race.

"You tell me which offers the better value," MacLeod said.

He said golf would provide the same kind of well-heeled audience as yacht racing. "Golf does three times the audience. It does seven times the audience when Tiger Woods plays."

One million viewers tuned into NBC in the United States alone on September 7 and 8, the first two days of the America's Cup finals, said network spokesman Alex Rozis. The audience dropped to 110,000 when the broadcast moved, as planned, to subscriber-based NBCSN last week, but it more than doubled to 250,000 average viewers on Saturday and 240,000 on Sunday.

GPS and helicopter-mounted cameras allow viewers to watch live footage of the sailors steering and grinding, and 13 microphones aboard each yacht allow the audience to hear the sailors shouting directions. Digital enhancements developed for the 34th America's Cup show wind, currents, boat tracks, course boundaries and mark rounding zones.

The racing has been broadcast to 170 other countries and territories, from Bangladesh to the Czech Republic to Argentina. In addition, viewers have watched the races on Youtube.com 1.1 million times, said Tim Jeffery, America's Cup spokesman.

"For years, we've had people use clichés about yacht racing, such as it's like watching grass grow or paint dry," he said. "On network TV, we had just under a million watching live yacht racing on a Saturday packed with established sports. That's a real achievement."

Nearly one-quarter of the residents of the sailing-crazed island nation of New Zealand were glued to their screens for Sunday's razor-tight races, according to the New Zealand Herald newspaper. It said 927,000 of 4.4 million Kiwis watched live broadcasts of the matches.

The 2013 America's Cup regatta had threatened to go off the rails due to a dearth of challengers, labor protests, a cheating scandal, a fatal training accident and a month of lopsided matches.

But then what NBC called the "September Showdown" began delivering the promised high-adrenaline, edge-of-the seat racing on television.

BENEFITS FOR CITY REMAIN UNCLEAR

The cost of hosting the event to the city of San Francisco remains untallied, but TV footage of yachts appearing to fly atop the waves on foils against the backdrop of the Golden Gate Bridge and Alcatraz Island have provided a priceless plug for Bay Area as well as sailboat racing.

"It's an iconic view," said Laurie Armstrong, a San Francisco Travel Association spokeswoman. "The publicity from this is really, really spectacular."

Mark Buell, chairman of the America's Cup organizing committee, said it was too early for a cost-benefit analysis of the expenses shouldered by the city. About $16 million has been raised to date to offset an estimated $20 million needed to make up the projected cost of extra police, additional public transportation and other expenses to San Francisco.

The most recent estimates projected the regatta would attract 2 million visitors, provide $900 million in city revenue and create 6,500 jobs. As of Sunday, only 700,000 spectators had been counted, Jeffery said.

The numbers, however, failed to consider viewers seeing the races in boats, from Alcatraz Island and from spots around the Bay, he said.

For each of the past two Saturdays and Sundays, Jeffery said, an estimated 50,000 fans have watched along the San Francisco waterfront, as the giant twin-hulled yachts with 13-story-tall wing sails crossed within inches of one another out on the racecourse.